I've been working as the Social Media Editor and a staff writer at Forbes since October 2011. Prior to that, I worked as a freelance writer and contributor here. On this blog, I focus on futurism, cutting edge technology, and breaking research. Follow me on Twitter - @thealexknapp. You can email me at aknapp@forbes.com

Study Finds That Streaming And Spyware Are Killing Music Piracy

It seems that people just aren’t pirating music the way they used to. In many cases, because they don’t have to. That’s according to the NPD Group, which just released their “Annual Music Study 2012.” That report shows that the number of music files being illegally downloaded was 26% less in 2012 than in 2011. What’s more, 40% of the people surveyed in the study who said that they’d illegally downloaded in 2011 did not do so in 2012.

So what’s responsible for this massive reduction in piracy? According to the survey, it’s not stepped-up enforcement – it’s the availability of free music via streaming services like Spotify. Nearly half of the people who had stopped or sharply reduced their music downloading cited those services as the reason for stopping.

“Among other factors, the increased use of legal and licensed streaming services has proven to be an alternative for music fans who formerly used P2P networks to obtain music,” said NPD senior vice president Russ Crupnick in a press release.

What’s interesting to me is that streaming isn’t just killing downloads. 44% of the survey respondents indicated that they’d also stopped ripping CDs from friends and family. Which makes sense. Why bother if you have on-demand access?

Another major factor is somewhat related to litigation – 20% of users reported that they’d stopped illegally downloading music either because their favorite site was shut down, or because the sites that are around now are so underground that they’re filled with viruses and spyware.

I suspect that as streaming services become more prevalent and as even more music becomes available on them, piracy will continue to decline. This will also likely to be the case for movies and TV shows going forward, as they continue to be made more widely available. The only real question for the industry is whether the revenues from those streaming services will be enough for them to survive.

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Unfortunately, the huge leap in streaming music has completely left me behind. 99% of my music listening is done in the car during my commute, and data usage caps on my phone ensure that streaming music is impractical. I almost never listen at home or anywhere else where I have access to a wifi connection. Until the mobile providers go back to having unlimited data plans, Spotify and other streaming services will continue to be completely useless to me.

bencarl, I use rhapsody on my iPhone (also has an android app), and you can download everything on wifi and listen to it in the car without streaming it. At home, download everything you want to listen to, then click the “go offline” button and you can listen to all of it. Just have to log in every once in a while to update the license key.

All the on demand streaming services offer offline downloading if you subscribe to their premium service, which is $10/month. This includes Spotify, Rdio, and Rhapsody. There is also Slacker Radio which plays radio, and for $4/month you can cache some stations for offline listening. I don’t even own a smartphone, but can listen to all of this on my iPod Touch in my car. I think the price is reasonable.

The thing is that when I was a teenager I was into albums. I was interested in the artist and all the material they did. Today teens are maybe liking a couple songs or even just one song on a album. You look at song ratings for artists on iTunes. You see a few good ones and a lot of duds or I don’t care songs. I have to wonder if someday many artists will simply stop putting out full albums and focus on song releases? This I think is where streaming comes in. I think subscription based services will grow as less and less people want to own a song forever. I know I have a big CD collection but I guess almost half of them I don’t ever listen too anymore. Would I like my MP3 player to have the ability to consitantly update to playlists from subscription based service? You bet, I have changed my mind about owning songs or albums.

Who uses P2P anymore and what the heck is Spotify? Just go to youtube or any of the hundreds of streaming sites, and if you want download it from there. Don’t pat yourselves on the back, because if you truly think legal stream sites are what is bringing down piracy you are delusional! People who want things for free are just going elsewhere, whether it be streaming or one click hosters, piracy is as alive as ever.

I wonder what is waiting for these streaming sites, what’s the next step. Seems like something new is always happening. I confess that I’m a part of the stats. I stream music too, because it is such an easy way to listen to music, so why the hell not?! I’m using a new site that’s called music.torchbrowser.com and I’m enjoying every minute of it :)